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When comparing the statements of two different companies, a financial analyst would use the profitability and equity ratio, that are the two accounting ratios.
The return on equity ratio is a profitability ratio that evaluates a company's capacity to profit from its shareholders' investments.
In other terms, the return on equity ratio indicates how much profit is generated per dollar of common stockholders' equity, and both the ratio compares the financial statements of two different companies.
Therefore, the two ratios are profitability ratio and equity ratio.
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